Loblaw Companies Ltd. has signed a partnership deal with technology company Gatik to test autonomous delivery vehicles in Toronto starting in January. Under the multi-year agreement, Gatik will transport goods from an automated picking facility to retail locations across the Greater Toronto Area.

 The bulk of Loblaw’s e-commerce customers use its PC Express “click-and-collect” service to pick up online orders at stores. What Loblaw is looking to do – and Gatik’s strategic focus – is to make the “middle-mile” journey of orders from hub locations to various pickup points, more efficient.

“The [retail] industry very often talks about last-mile [delivery to customers’ homes], and not so much middle mile … but it is a huge opportunity,” Lauren Steinberg, senior vice-president of Loblaw Digital, said in an interview. “The lens that we are looking through, for this pilot, is to enhance our supply chain elasticity.”

The old retail infrastructure – storing products at centralized warehouses – has had to evolve to keep up with the rise of e-commerce. Many retailers are now using what are known as “hub-and-spoke” systems, to allow orders to be filled closer to where the customer is, and transported to a pickup point in a shorter amount of time. In 2019 Loblaw announced that it would convert part of a Great Canadian Superstore in Toronto into a “micro-fulfilment centre.” That is now up and running, using some automation to help staff fill hundreds of e-commerce orders every day, for pickup at stores around the city.

In this new trial, Gatik will operate five vehicles for Loblaw up to seven days a week, 12 hours a day, on five routes with fixed pick-up and drop-off locations. Gatik will outfit the trucks with refrigeration units, lift gates and its autonomous self-driving software for urban, suburban and highway driving. All vehicles will have a safety driver as a co-pilot. The agreement follows a 10-month on-road pilot in Toronto, with one autonomous delivery vehicle.

Source: Globe and Mail
Source: Toronto Star